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Book Review – Les Rémunerations Obscènes

January 3, 2012 by and tagged , , , , , , , , , , , ,

Philippe Steiner‘s Les Rémunerations Obscènes is a pamphlet more than a book per se. With a 134 pages of text, it a short and clear read on the topic of the stratospheric compensations received by corporate CEOs and their lack of justification. However, the book is not just a rant against these compensations packages. Steiner systematically debunks one by one, armed with both economic and organizational sociology and some solid references to research, all the justifications commonly employed to rationalize the levels of CEO compensation.

The book is also shock full of data detailing the various levels of compensations, their evolution and trajectories, alongside some more well-known data on the increase of inequalities and wage stagnation for the rest of the population. The icing on the cake comes from some morceaux choisis from CEOs themselves, in their own words, explaining why they should be paid such obscene compensations. Finally, the book ends with a few suggestions as to what should be done.

The sociologists will also find in the book some constant references to classical (Weber, Durkheim) and more contemporary sociologists as Steiner goes through some SHiP (Structure / History / Power) demonstration to explain how we got to these levels of compensation, why the upward trend has been so steep and continues to this day irrespective of objective factors such as performance. Steiner has done his homework and the bibliographical references are quite extensive for such a short book.

Using Weber, Steiner argues that the obscene levels of compensation have nothing to do with capitalism, which is supposed to temper the irrational passion for profit-seeking through a variety of mechanisms. The unleashing of greed is not part of such mechanisms. The corporate übermenschen (as Steiner calls them, “surhommes”) have managed to disconnect themselves from social ties that would link them to social norms and a general sense of the way the mere mortals live. The strong ties to the political world also increase the amount control that these men (yes, men) exercise over their own enrichment. And has been recently exposed, it is Goldman Sachs world. The rest of us just live in it.

The strongest parts of the book are those where Steiner explains the organizational processes at work in determining CEO compensations, especially the work of compensation committees. These committees may be composed of other CEOs, and they may use information provided by consulting firms specialized in constructing remuneration packages. This is where social capital and social networks analysis is central. These compensation committees look like a game of revolving door and mutual back-scratching disguised under rationalizations such as preventing CEOs from leaving the country if they do not get a globally-competitive level of compensation, the ability to attract the best and brightest. In reality, this looks more like CEOs looking at each other’s compensation and saying “I want at least what they have!” The processes are those of a very close and tight-knit in-group.

What of the argument that compensations packages are often tied to performance (in terms of stock value) and therefore, there is a level of accountability? Steiner reviews the research and shows that that is simply not the case. First of all, there are all the anecdotes of golden parachutes. Second of all, compensations never decrease based on bad performance. They might not increase but that is it. Steiner shows that salaries and bonuses rise in ways unconnected to stock prices and values.

So, are CEOs so rare and so incredibly talented that their compensation levels have exploded? Steiner invokes his Micromégas regime of competition, with reference to Voltaire: minuscule differences between individuals translate into massive differences in compensation between CEOs and the rest. At the same time, CEO contribution to the value of firms is minimal. At the same time, throughout organizations and recruiting firms, there is the belief in extreme individual agency, that is, the belief that whatever firm results are fully attributable to CEO decisions. This belief is taken as religious dogma (except, of course, when the company collapse and all of a sudden, someone like Enron’s Jeffrey Skilling argues that he didn’t know anything that was going on in the firm). If “I” did all this, then, “I” deserve to appropriate such a high share of profits, not the hundreds, or thousands, or tens of thousands of people who have contributed to innovation, productivity, etc. And this appropriation has to be at a level comparable to that of other CEOs, worldwide.

On the other side of things, firms that design compensation packages tend to think that (1) they will not be able to attract the “right” candidates if compensation packages are not tempting enough, and (2) that a company would symbolically debase itself if it did not come up with a phenomenal compensation package (one that is more impressive than that of comparable firms). This triggers compensation inflation as chain reaction.  Companies offer enormous compensation packages as status signals that reflect on them.

Steiner also analyzes the current indignation regarding executive compensation using Durkheim’s concept of moral economy, that is, the social evaluation of the functions and compensation. The level of contestation has to do with the legitimation crisis that has been intensified by the economic crisis, itself revealing the disconnect between compensation levels and the collapse of their justifications. Of course, politicians have grabbed the theme of a moralization of executive compensation, but the tangled web of political/corporate connections guarantees that said moralization will not go beyond rhetoric.

Invoking The Spirit Level, Steiner ends by noting that obscene compensation is a social pollution, contributing to rising inequalities and their deleterious effects. The book is a bit short on solution (fiscal policy), which is a shame but changing the structural nature of obscene compensation probably would take a whole book in itself.

In light of the current crisis and the imposition of “sacrifices” on populations across the Western world, this topic is highly relevant. In the context of the upcoming French presidential election, and as the main candidates start to unveil their platforms, this book comes out at the right time and should be mandatory reading to said candidates.

Posted in Book Reviews, Collective Behavior, Corporatism, Economic Sociology, Ideologies, Networks, Organizational Sociology, Public Policy, Social Capital, Social Inequalities, Social Institutions, Social Privilege, Social Stratification, Sociology | No Comments »

The F!@ck You Conception of Control – The Big Squeeze Edition

October 22, 2010 by and tagged

As this article from Le Monde details, airlines offering cheap airfares are poised to make big money by squeezing passengers of as much money as possible to the creative use of fees on… well… everything and anything. This year, these companies will earn €18.4 billion worth of fees (as opposed to €11 billion last year). For companies like Ryanair or Flybe, these fees represent almost 20% of their revenues, compared to 7% for larger carriers such as AA or Delta or United. This increase should continue dramatically. Industry analysts estimate that additional fees could increase more than 300%, earning about €75 billion)

There are no limits to the imagination that companies deploy when it comes coming up with new fees beyond the traditional baggage fees: special seats in coach, a little more leg room. Heck, why not charge for going to the bathroom, as was suggested a while back? The passengers are relatively captive when it comes to flying, so, they can be slapped around with fees on anything.

Although, things I would pay a fee for:

  • kids-free cabin
  • gross people-free cabin
  • reliable charging outlets and wifi
  • vegan food

But then, it’s only par for the course of a system turning more and more predatory.

So, in the US, it’s house grab time. In the periphery, it’s land grab time… neoliberalism for every part of the world-system:

“ROME (Reuters) – A top U.N. inter-governmental body on food security has failed to endorse a code of conduct on foreign land investments, in a blow to efforts to draft international guidelines to regulate so-called “land grabs”.

Responding to concerns about countries like China, South Korea and Gulf Arab states buying large swathes of land in Africa and Asia to secure their food supplies, the World Bank and U.N. agencies drew up seven principles for “responsible agricultural investment.”

But a meeting of the U.N. Committee on Food Security (CFS), which dragged on into the early hours of Friday, failed to endorse those principles, simply “taking note” of them, participants told Reuters.

“It’s terribly disappointing,” said Olivier De Schutter, the U.N. special rapporteur on the right to food.

“We are not moving swiftly enough to find an effective answer to the problems posed by land investments.”

The principles advocated by the World Bank, and sponsored by Japan, say existing rights to land should be respected, investment should not jeopardise food security, and all those materially affected should be consulted.

(…)

The principles were drawn up after a spike in food prices to record levels in 2007-08 sparked a wave of land deals, as food-importing countries and major agricultural businesses sought to increase their food supplies and protect themselves from price volatility.

Some 45 million hectares worth of large scale farmland deals — roughly the size of Sweden and a tenfold increase from previous years — were announced in 2009, the World Bank said in a report released last month.

Aid groups say that such deals come at the expense of small farmers in African and Asian countries and could end up worsening poverty and hunger in less developed countries.

With the World Bank principles sidelined by the CFS, the focus now shifts to a set of as yet ill-defined voluntary guidelines which have been in the works since 2008.

A draft of the guidelines, the result of consultations between the U.N. Food and Agriculture Organisation (FAO), member states and civil society groups, is due to be submitted to the CFS in a year’s time.

In any case, both the World Bank principles and the FAO’s voluntary guidelines are non-binding.

Critics say any new rules risk being too little, too late as land deals continue unabated and could even increase on the back of the recent rise in cereals prices due to drought in Russia and flooding in Pakistan.

In the past two weeks alone, an Egyptian private equity firm has announced plans to invest $40 million to grow crops in Sudan and the head of Qatar’s national food security programmes told Reuters talks were under way to buy land in Ukraine and Argentina for cereals’ production.”

Posted in Economic Sociology | No Comments »

The Sociology of Everything – Panhandling

August 31, 2010 by and tagged , , , ,

It is an obvious thing to say that economic exchange do not exist in a vacuum. They are embedded into the social structure and cultural norms and scripts. Examples of this abound…

Over at the always excellent, but not updated often enough for my taste!, Economic Sociology, Brooke Harrington discusses panhandling variations depending on the national context. That is, what kind of script do panhandlers invoke to get the most donations? Harrington argues that it is a matter of culture:

“So it’s sociologically interesting that within the North American context, the concept of “home” has such resonance that the claim of “homelessness” is considered a compelling and sufficient motive for giving money to strangers. But while the need for shelter would seem universal, it’s rare to see a panhandler outside North America requesting a donation on the basis of homelessness.

In Germany, for example, one often finds people begging for “trinkgeld”—”drinking money.” And they’re not playing for laughs, as one sometimes finds in the US, when panhandlers give a wink and a nod to the stereotype that money given to beggars is only ever used to buy alcohol (or drugs). When a panhandler asks for “drinking money” in the US, it’s sort of an in-joke, or an attempt to appear disarmingly honest; based on the limited examples I’ve seen, this seems to jolly people up and get good results (i.e., quantities of cash).”

I would argue that, in the American case, one has to prove that one is a “deserving” poor. Americans tolerate those they define as deserving poor: the sick, the disabled, the Veteran, as opposed to the undeserving poor, the lazy, shiftless, and the drug addicts and perpetrators of other moral turpitude who have nothing but themselves to blame. Those deserve no help. So, in drafting one’s panhandling sign, one has to use a vocabulary of motive that places one squarely in the deserving poor category.

In France, especially in areas populated with old people, getting a dog is the ticket to higher donations. Old ladies, especially on the French Riviera (populated with a lot of still resentful “pieds noirs”, French kicked out of Algeria at the time of the independence), a panhandler can rot, but a dog should not suffer. Cats work as well. Kittens and puppies are even better.

So, panhandlers have to choose: get a dog means some security but losing access to shelters that usually do not accept animals; but getting a dog will bring in more money from the old ladies.

In Paris, one witnesses a lot of panhandling on the subway. For subway dwellers, it always starts with someone loudly starting “Messieurs, Dames, I am sorry to bother you but…” (“ladies and gentlemen, I am sorry to bother you but… [then follows the pit which often invokes children and families to support]) then the panhandler walks up and down the subway car to collect.

Harrington provides further examples:

“Yet another vocabulary of motive can be found on the streets of Istanbul, where panhandlers often approach passers-by with a request for “etmek parası”—Turkish for “bread money.” In perhaps 10 visits to Turkey in the last 3 years, I’ve never seen anyone on the street claiming to be homeless. Nor have I seen a cardboard sign of the kind so common in North America.”

I don’t think bread money would work well in affluent Western societies anymore as bread no longer is the heart of Western nutrition, the basic minimum that everyone should get even the most stigmatized (“au pain et à l’eau!”), the cheapest food item. Going to shop for bread at Whole Foods but all the multi-grain varieties shows that bread can be treated as refined food.

Anyway, back to my subway panhandling interactions, one strategy that I have seen people use is to do something annoying, like bad singing. The panhandler sing one song, collects and if he has received enough (what “enough” is, of course, is relative), he moves on to the next car, to the relief of the passengers. If the collection is meager, the passengers get another round of bad singing. It is a tight rope to walk though. Similarly, looking and acting crazy does not help, considering how much mental help is an issue with homeless people, that is another fine line to toe.

And, of course, I could not read on this issue without being reminded of the strategies the Romanian kids of Children Underground (full documentary here) used to get as much money as possible:

The other parts are posted on Youtube as well. Children Underground is an important documentary that everyone should watch. If I wanted to be snarky, I’d say that it should be mandatory viewing for anyone opposed to abortion and birth control.

As the cool kids say, go read the whole post over at Economic Sociology.

Posted in Culture, Economic Sociology, Embeddedness, Poverty, Sociology, Teaching Sociology | 1 Comment »

The F!@# You Conception of Control – Broadband Edition

July 26, 2010 by and tagged ,

In totally unsurprising news

“Britons are not getting the broadband services they are being sold, suggests a government report.

Ofcom’s analysis of broadband speeds in the UK shows that, for some services, 97% of consumers do not get the advertised speed.

It also shows a growing gap between the claims ISPs make for broadband and the speed being delivered.

To fix the problem, Ofcom is revamping the code of conduct for ISPs and asking for changes to how broadband is sold.

(…)

Unveiling the figures Ed Richards, chief executive of Ofcom, said the survey revealed a “growing gap” between what people are sold and the reality of their broadband service.

“The gap between the average headline speed and actual speed has increased in this period even though the actual speed has risen,” he said.

In 2009, he said, when actual speeds for broadband were 4.1mbps, the average that those services were being advertised for stood at 7.1Mbps. In 2010, when people are generally getting 5.2Mbps out of their broadband, ISPs are claiming they will support speeds up to 11.5Mbps.”

And the industry’s rationalizations are actually quite funny.

Posted in Economic Sociology, Technology | No Comments »

The F!@# You Conception of Control – Avoiding Customers Edition

July 19, 2010 by and tagged , ,

This couple of stories do not really have anything new but it clearly illustrates what I have come to call the f!@# You Conception of Control, that is the idea that it becomes the accepted norms that corporations may not really care about the product they put out and rely on horrendous “customer service” to keep customers from using too much of the product they pay for.

Health care:

“Trying to get ahold of your insurance company means negotiating a bewildering maze of phone trees and webpages.  I use Humana, but I don’t have any reason to believe that any other insurers are any different.  The key point to remember is that your insurance company DOES NOT want to talk to you.  Maintaining a call center is expensive, and the company will undertake whatever means it can in order to force you onto an automated system or, barring that, attrite you into submission.  Moreover, the question you have, if answered properly, might cost the company money.  This is bad, and the insurance company is going to do its darndest to make it difficult for you to get the information you need.  On a couple of occasions I was forced to repeatedly enter my policy ID# in order to move on to the next phone tree, all with the carrot of a “patient care representative” dangling in front of me.  At one step, the system insisted that I verbalize my ID#, birth date, and zip code. No matter how clearly I said any of these, I was then forced to punch them into my phone keypad.  I was told at one point to represent any letters in my ID# with the star key.  I was then dragged through the agonizingly slow process through which the automated system tried to figure out exactly what letter a star represented (“Press 1 for G.  Press 2 for H.  Press 3 for I”).  At another stage in the phone tree, the automated voice refused to accept any number I pressed before it was done speaking.  If I made the error of pressing a number before the sentence was finished (and the robot, for some reason, favored long, pregnant pauses), then the system would stop for about 15 seconds before telling me that it didn’t understand what I was trying to say.  It would then repeat its entire spiel.  When you finally reach “waiting for the next patient care representative” stage, you are invariably treated to ridiculously terribly music punctuated by a voice patiently explaining how useful the website or the automated system would be, with the implication that you’re a moronic ingrate for needing an actual operator.  On one occasion, I made it through the phone tree only to be told that the call center was closed.

Perhaps my favorite roadblock was on the (otherwise useless) Humana website.  Shortly after creating your account, the website insists that you read a series of statements about the confidentiality of your health care, and that you click “I agree” at the bottom of each statement.  If you don’t scroll down and read the entire statement, it refuses to let you move on.  Ingeniously, one of the statements didn’t show any scroll bars on the page.  It simply didn’t allow you to move forward.  Clicking on “I agree” only makes you more angry, with the eventual (I assume) purpose that you will hit your keyboard so hard that your computer will break, thus saving the insurance company any additional difficulty.

None of this is accidental.  The point is to irritate and confuse the customer so much that he or she eventually hangs up.  It works, too.  We would all like to think that we have the wherewithal to fight through the system, but often we don’t.  We run short of phone minutes, or we get another call, or we have to do any one of the myriad things that amount to normal, everyday life, and we end up hanging up.  This is what the insurance company calls “a win.””

Wireless:

“I’ve never once gotten any money taken off of my bill from AT&T despite every single one of those months being filled with dropped calls and overall shit service. If I called to complain I might be able to get something back — but I’d have to do that each month. And even if I didn’t drop the call when calling them up, have you ever tried calling one of those customer support numbers? Kill me.

And I loved when AT&T tried to spin their recent termination of unlimited data plans as a good thing for customers. Almost all customers will be paying less under the new plans, is how the company line read. Sure, right now. But in a couple years (when you’re still under contract, by the way), these plans are going to screw you. This is all about AT&T taking precautionary measures so they can make more money down the road.

It’s not about saving their customers any money. It’s a lucky side-effect of their larger agenda to get data consumption under control. It’s total bullshit.

Vogelstein’s takeaway seems to be that all customers should get used to high prices and declining service as wireless demands continue to increase. Sadly, that’s probably true.”

And I am sure I could find further examples from the airline industry as well.

Posted in Economic Sociology, Embeddedness, Sociology | No Comments »

Market Failures and Inefficiencies, Culture and Control

July 11, 2010 by and tagged , , , , , ,

A while back, Brooke Harrington, over at Economic Sociology, posted on how the best products do not always prevail on markets, using as example the Qwerty keyboard. It is a familiar story that, according to Harrington, economics is ill-equipped to explain, as opposed to economic sociology:

“But these cases also showcase the value that economic sociology can add to our understanding of markets, particularly through the lens of culture—the sort of variable that gets thrown into the dreaded black box of “preferences” in economic models. Black boxes exist in the world of academic theory to contain factors that are unknown, perhaps unknowable; this often gets interpreted to mean that the factors are not worth knowing about. Thus, the origins of preferences, and the ways preferences change, are treated by most economists as uninteresting and irrelevant.

Yet for sociologists, these are the most interesting things about economic behavior. Culture, class, identity and ideology—core issues in sociological research—all play a role in shaping preferences. These forces are not easy to model, which is a major reason they get left out of economic scholarship, where elegance and parsimony are valued above empirical verisimilitude. So, as one classic article put it, sociologists get “dirty hands” from dealing with lots of data and variables, while economists construct “clean models” that exclude such messy complexities.

What sociological theories may lack in “cleanliness,” however, they make up for in explanatory power. I was struck by this recently while contemplating a puzzling business failure in my own backyard: the Belgian supermarket chain Delhaize shut its doors in Cologne and Aachen, the two cities where the firm had tried to gain a foothold in Germany. Here were stores vastly superior to their competition—selling a much broader and higher-quality range of goods than anything available in local grocery chains, all at very reasonable prices—and yet the business failed.”

Better products, loyal customer base, why did it fail? Using Bourdieu’s classical Distinction to note that taste is part of habitus so that the presence of better quality goods may not be enough if such goods have not been integrated into a class-based habitus. Which means that we associate all sorts of consumer goods with our ideas of what feels / tastes right, and we make these part of our identity. These associations are deep and hard to change, even if faced with the fact that other goods are of better quality. I would argue that it works the other way around as well, consumption practices that distinguish from the top would also be equally hard to change if even if one could show equal quality, lower-prices similar goods.

In other words, market successes or failures may have to do with non-economic factors such as class habitus and national culture in which market practices are embedded. But this failure was not deliberate.

Another example of expected market inefficiency regards broadband in the United States (via Corrente):

“Even the oldest US Senators have gotten the message—the US wants fast broadband. And they have started to ask FCC Chair Julius Genachowski some hard questions about why the new National Broadband Plan sets such apparently modest goals for the US as 4Mbps universal service by 2020.

Octogenarian Senator Daniel Inouye (D-HI) put it most bluntly in a recent set of written questions (PDF) to Genachowski from the Senate Commerce Committee.

“The National Broadband Plan (NBP) proposes a goal of having 100 million homes subscribed at 100Mbps by 2020,” he wrote, “while the leading nations already have 100Mbps fiber-based services at costs of $30 to $40 per month and beginning rollout of 1Gbps residential services, which the FCC suggests is required only for a single anchor institution in each community by 2020. This appears to suggest that the US should accept a 10- to 12-year lag behind the leading nations.”"

Why plan for something inefficient and non-competitive right off the bat? Bring in the power elite and ask the usual sociological question, cui bono? Well, the companies that would stand to lose if they had to give up their original (and still money-making) business because of increased competition (television and phone both of which could be replaced by broadband) and had to adapt by providing high-speed broadband comparable to that of other countries. This would be damaging to the f!@# you conception of control.

Needless to say, this goes against innovation, and Avedon explains why avoiding innovation is a necessity as class strategy:

“The truth is that since economic “conservatives” have taken over running our economy, there hasn’t been any real innovation at all. And that stands to reason, since this environment is one in which the ordinary people who do things for themselves and do the real work – and are therefore the most likely to be inspired to real innovation – are simply not in a position to put their ideas into practice, to bring them forward. The very rich do not like real innovation because it destabilizes their order, it makes change possible – change that could weaken their position, or make the behavior of the masses less predictable. They like us to be predictable. But now, here we are, in a situation where we have allowed a few people to amass most of our nation’s wealth and refuse to spread it around where it can do some good, and, well, bad things happen to unequal people. But of course, the remedy, we are told, is to apply leeches to stem the blood loss, and if you haven’t stopped losing blood, bleed you some more.”

Which makes it entirely not surprising that a great deal of corporate and governmental activity has been dedicated to limiting what people can online (such as urging customers to NOT use the product they paid for and blaming them for high usage, or make them pay more rather than fix a problem, or eliminating unlimited plans, to fighting against net neutrality, to extensive surveillance of our online activities). In these cases, as Avedon notes, innovation means loss of control.

So, market inefficiencies may operate as stratification consolidation.

Posted in Consumerism, Culture, Economic Sociology, Embeddedness, Social Inequalities, Sociology | No Comments »

Book Review – This Land is Ours

June 13, 2010 by and tagged , , , , , , , , , ,

Wendy Wolford‘s This Land is Ours: Social Mobilization and the Meanings of Land in Brazil is a much more pessimistic book than the one I previously reviewed. Here again, Wolford writes about the MST, but where To Inherit The Earth was a fairly optimistic history of the rise of the movement, the present book (more recent) addresses more directly the failures of the MST, especially the failure of massification, that is, the MST’s attempt to succeed outside of the Southern states (especially in the Northeastern states) at the same time that the movement was becoming a national and global force on behalf of peasants.

In this book then, the focus is more on what happens within a social movement once it scales up. Oftentimes, social movement organizations are depicted as homogeneous totalities. Wolford goes deeper into the MST and examines the various modes of mobilization and their success (or failure).

She first looks at mobilization in the Southern states (the MST’s place of birth and its greater success in mobilization), then turns her attention to the Northeaster states, where success has been limited. Why such a difference? For Wolford, the explanation revolves around the concept of moral economy.

What does this refer to? Wolford points to a working paper by Andrew Sayer (2004) on the subject:

“It is now commonplace to note the influence of rules, habits, norms, conventions and values on economic practices and institutions and to note how these vary across different societies. Economic processes, even capitalist ones, are seen as socially embedded in various ways. Thus there is no ‘normal capitalism’, only different varieties, distinguished partly according to their cultural legacies and forms of embedding (Hollingsworth and Boyer, 1997; Crouch and Streeck, 1997, Hall and Soskice, 2001). The rise of ‘cultural political economy’ has complemented this focus on embeddedness. If culture is taken to refer to signifying practices then economic practices can be seen in terms of what they signify as well as materially, and as culturally embedded (Ray and Sayer, 1999; du Gay and Pryke, 2002).

(…)

In this paper, I revive this focus by using a moral economic perspective to examine some of the ways in which markets are associated economic phenomena both depend on and influence moral / ethical sentiments, norms and behaviours [sic] and have ethical implications. As a kind of inquiry, ‘moral economy’ is the study of how economic activities of all kinds are influenced and guided by moral dispositions and norms, and how in turn these norms may be compromised, overridden or reinforced by economic pressures (Sayer, 2000). On this definition, all economies – not merely pre- or non-capitalist ones – are moral economies (Booth, 1994). We can also use the term ‘moral economy’ to refer to the object of this kind of inquiry.  Of course, what counts as moral, as opposed to immoral, behaviour is contestable; some forms of moral economy, for example, that of patriarchal household, might be deemed immoral, or as domination disguised as benevolence and fairness.” (pp. 1-2)

For Sayer, a major founding father of this kind of thinking was Adam Smith, who was never the pure free marketer that neo-classical and neo-liberal economists make him out to be.

For Wolford, the different moral economies between the Southern and the Northeastern Brazilian states largely explains successful mobilization in the former and demobilization in the latter. In the Southern state, economic practices revolved around small farming whereas in the Northeast, rural wage labor (mostly in sugarcane plantations) prevailed.

In this sense, the MST emerged in the Southern state and promoted what was already the cultural and moral system of farming: small landholding. To fight for agrarian reform in effect reinforced an already-existing moral economic perspective. Mobilization was therefore easier to promote and “sell” to the peasant population because it matched their habitus (if I dare use this term even though Sayer contends that Bourdieu’s concept fails because it lack moral dimensions).

In the Northeast where moral economy is based on rural wage labor and the paternalistic structure dominated by the plantation owners and their bosses constituted a moral economic background where small farming (with no wage and therefore more uncertainty) was harder to accept. Part of this moral economic structure also included the fact that if a worker does not get along with a boss, he packs up and leaves for the next job and stay there as long as things work out. In this context, a small farm is not something one can walk away from if things do not work out.

Moreover, the MST had as goal to get former rural workers / new small farmers away from sugar cane and to get to plant staple and local market crops through sustainable means. However, the new farmers preferred to plant sugar (what they knew) but on their own land, they ran the risk of no income if crops failed and they lost the benefits attached to working on a large plantation. In addition, the workers resented the “collectivism” promoted by the MST and seemed to prefer an indvidualistic organization of production.  In this sense, they saw membership in the MST as an instrumental matter (get land) but would drop it as soon as that goal was achieved as they saw MST requirements as too constraining.

Through interviews and accounts regarding the relative failure of mobilization in the Northeast, Wolford reveals the clash of moral economies between the MST organizers and leaders and the rural workers who thought the MST people behaved like the bosses without the benefits. When the sugar economy failed, rural workers were more receptive to the MST message but once it recovered, they went back to planting sugar.

In all, this book is written more for an academic audience than To Inherit the Earth. It makes greater use of theories. That being said, it is still an fascinating read as it contains a lot of field materials, interviews and descriptions even if the tone is definitely more pessimistic.

Posted in Book Reviews, Corporatism, Economic Sociology, Embeddedness, Global Civil Society, Indigenous Populations, Labor, Public Policy, Social Inequalities, Social Movements, Social Norms, Sociology | 6 Comments »

“Beyond a Certain Level, Connectivity Becomes a Hazard”: Volcanoes and Subprimes

April 25, 2010 by and tagged , , , ,

The title from this post is borrowed from a column by George Monbiot in The Guardian referring to what the volcano eruption and financial crisis have in common: strained system, pushed to the limits.

Although I disagree that we need less interconnectedness, but rather more sustainable ways of interconnecting and certainly systemic simplification whether in the financial sector or in dealing with environmental systems.

And speaking of the financial system, Rue89 has an excellent primer on the Goldman Sachs affaire, with a little video on “Subprimes for Dummies.” (Below but all in French)


“Le B.A-BA des subprimes”, le film
Uploaded by rue89. – News videos from around the world.

Posted in Economic Sociology, Economy, Embeddedness, Environment, Sustainability | No Comments »

Credit Default Swaps – Explained

April 8, 2010 by and tagged , , , , ,

Chad Gesser is right, this is a very good and short (and yes, simplified, but it has to be if you’re going to make it short) explanation of this specific aspect of casino capitalism  – CDS – that triggered the crisis. It also mentions the larger issue of Congress / Wall Street too cozy relationship, and the privatization frenzy that is the trademark of neo-liberal dominance. As Neil Fliegstein told us: governments create markets. Markets are fields defined by (1) property rights, (2) governance structure, (3) rules of exchange, and (4) conceptions of control. It is the neoliberal state that created the conditions for this disaster and continues to protect its features:


Watch CBS News Videos Online

And as a perfect illustration of the Great Risk Shift, all this gambling with other people’s money or with no real money, ended up with mass socialization of losses and privatization of the loot that resulted from this predatory system.

Posted in Economic Sociology, Embeddedness, Politics, Risk Society | No Comments »

A Sociology of Global Chaos?

February 16, 2010 by and tagged , , , , , , ,

The dominant mythical narrative of globalization (a la Tom Friedman) is one where the Global North is politically stable, economically prosperous and culturally modern as opposed to an overpopulated, politically corrupt, economically under-developed and socially chaotic Global South. As such, the Global North could dictate economic policies to the Global South through institutions of global governance such as the IMF, the World Bank and the WTO. With the US and European-led recession and the collapse of Greece, it might be time to revise that narrative.

Will Hutton:

Immanuel Wallerstein:

Is it any wonder that the neoliberal state is largely a repressive and war-making state “thriving” in the global risk society.

Posted in Economic Sociology, Economy, Embeddedness, Failed States, Global Governance, Globalization, Risk Society | No Comments »

“Guard Labor”

February 7, 2010 by and tagged , , , , ,

This is interesting (and cited everywhere already):

I would argue that in the context of the surveillance society, this notion needs to be broadened beyond protecting private wealth to other forms of power preservation.

And nice debunking of the functionalist view of inequalities. Actually, the idea of imposing discipline is a nice illustration of the role of the neo-liberal state provided by Wacquant in Punishing The Poor.

Also, the idea that inequalities are actually detrimental to society as a whole, including the wealthiest segments is thoroughly explained in The Spirit Level.

Furthermore:

Posted in Economic Sociology, Economy, Labor, Social Inequalities, Social Stratification, Sociology, Surveillance Society | No Comments »

Low Taxes = High GDP Growth? Not So Fast

February 7, 2010 by and tagged , ,

Take a look at this neat graph from Baseline Scenario:

Conclusion: it’s a lot more complicated than “tax cuts = growth” (I know, it is going to be obvious to a lot of people but this view still dominates socially acceptable economic discourse, so, it’s nice to see some clear debunking).

The post also has another graph that demonstrates that there is no correlation between tax rate and unemployment rate among OECD countries.

One can also refer to Lane Kenworthy’s Egalitarian Capitalism for more on that subject.

Posted in Economic Sociology, Economy, Ideologies | No Comments »

More Evidence for The F— You Conception of Control?

February 1, 2010 by and tagged , , ,

Looks like it to me…

Posted in Economic Sociology, Embeddedness, Sociology | No Comments »

The F— YOU Conception of Control

January 31, 2010 by and tagged , , , ,

One of Neil Fliegstein’s central concept, in his whole view of markets as fields, is that of conception of control. For Fliegstein, there are four types of rules and understandings necessary for structured exchange (market as field) to emerge: (1) property rights, (2) governance structure, (3) rules of exchange, and (4) conceptions of control. To put it simply, no market without social structuring by governments.

Let me reiterate here Fliegstein’s definition of “conception of control”:

“Conceptions of control reflect market-specific agreements between actors in firms on principles of internal organization (i.e., forms of hierarchy), tactics for competition or cooperation (i.e., strategies), and the hierarchy or status ordering of firms within a given market. A conception of control is a form of ‘local knowledge’ (Geertz 1983). Conceptions of control are historical and cultural products. They are historically specific to a certain industry in a certain society. They are cultural in that they form a set of understandings and practices about how things work in a particular market setting. A stable market is a social field in which a conception of control defines the social relations between incumbent and challenger seller firms such that the incumbent firms reproduce those relations on a period-to-period basis.

The purpose of action in a given market is to create and maintain stable worlds within and across firms that allow dominant seller firms to survive. Conceptions of control are social-organizational vehicles for particular markets that refer to the cognitive understandings that structure perceptions of how a particular market works, as well as a description of the real social relations of domination that exist in a particular market. A conception of control is simultaneously a worldview that allows actors to interpret the actions of others and a reflection of how the market is structured.” (2001, 35)

According to Fliegstein, and as summarized by Hass (2007, 106-7), the US has had five modern conceptions of control (CoCs) over the course of its modern economic history:

1. Cartels: groups of firms agreeing on prices, turf and tactics to minimize competition

2. Manufacturing CoC: mass market production where managers focus on a limited line of goods and security through vertical integration

3. Sales and marketing CoC: diversified output and marketed differentiation. This CoC prevailed from the Great Depression until the 1950s.

“Sales and marketing executives favor policies that boost sales by increasing marketing, differentiating products, and engaging in diversification of product lines.” (Fliegstein 2001, 129 – 30)

4. Financial CoC: by the late 1960s, early 1970, firms are no longer identified with what they make but rather as a set of more or less profitable assets to be deployed or abandoned.

“The finance conception of control originated with executives who were trained in finance methods and were primarily finance officers. Their balance sheet approach implies that the firm is no longer in the business of producing commodities, but instead operates as a set of assets. In such circumstance, divisions in the firm that do not perform up to expectations are sold off and new ones purchased. A central tactic is the use of mergers (and divestitures), often for diversification, to achieve growth.” (Fliegstein 2001, 129)

5. Shareholder value CoC:

“The shareholder value conception of control is also a financial set of strategies, but it had a particular critique of the financial conception of firms. The shareholder value perspective viewed the principal failure of the finance conception of control as the failure to maximize shareholder value by raising share prices.” (Fliegstein 2001, 149)

Or as Hass puts it,

“By the 1980s corporations held assets (e.g. property and land) that gave them a market value higher than their formal share prices indicated. Corporate raiders bought firms’ shares and sold off these assets for enormous profits. To fight raiders, managers improved share value by down-sizing (releasing employees and middle managers) and focusing on short-term profits to improve share value – keeping shareholders happy and proving that managers were doing their jobs (maximizing share value and shareholders’ assets). Now corporations are not products or profit as much as assets; strategies involve maximizing short-term value of these assets for shareholders, not the firm per se.” (Hass 2007, 107)

Now, why am I bringing all this stuff up? Because a couple of items that have made the news more or less recently have me wondering whether we are entering an era with a different conception of control for a specific market. Let me count the ways.

Items number 1: AT&T blames its customers for using too much broadband, which triggers this scathing statement from a satirical blogger pretending to be Steve Jobs:

Read the whole thing as it drips with sarcasm regarding the low quality of a dominant player on the market who chastises its customers for daring to use the product and service they pay for and trying to convince them to not use it as much.

The other item is even more recent and it pertains to Amazon.com removing all MacMillan e-books from its store and therefore from its Kindle stock. Now, issues about e-books have emerged before regarding the fact that the e-book merchant (Amazon.com, for instance) sells access to the e-book,not the e-book itself and therefore one could potentially “lose” the e-books one has purchased, as opposed to having a dead-tree book on your shelves for ever and ever.

So, the Amazon.com – MacMillan controversy is summarized nicely -  and equally sarcastically – by John Scalzi:

Can I call this the FU Conception of control?

Posted in Corporatism, Culture, Economic Sociology, Economy, Embeddedness, Sociology | No Comments »

Book Review – Euroclash

January 7, 2010 by and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Neil Fligstein‘s Euroclash: The EU, European Identity, and The Future of Europe is an application of Fligstein approach to economic sociology developed in his previous book, The Architecture of Markets (which, if I were remotely consistent, I would have reviewed first). A very simplified version of this approach is that markets do not fall from the sky but are institutionally grounded and developed by social actors.

Markets are also fields, in Bourdieu’s sense, where dominant actors try to establish rule to promote the stability with respect to the newcomers in the fields who might try to establish different rules. Markets are social structures defined by property rights, governance structures, rules of exchange, and conceptions of control.

“A field can be defined as an arena of social interaction where organized individuals or groups such as interest groups, states, firms and non-governmental organizations routinely interact under a set of shared understandings about the nature of the goals of the field, the rules governing social interaction, who has power and why, and how actors make sense of one another’s actions.” (8)

By definition, fields are dynamic in that power and resources are unevenly distributed among social actors and there are potential lines of tension and conflict over how the field is organized and function. And so, with the emergence and evolution of the EU, there has been the emergence of Europe-wide fields in a variety of social domains.

“Firms have moved from being participants in national markets to being involved in Europe-wide markets. They have come to invest all around Europe and employ citizens of many countries. Interest groups and social movement organizations have been part of constructing European political domains both in Brussels and occasionally emergent across national borders.  National nonprofit associations have pushed forward cooperation for professions, trade associations, charities, and hobby and sports groups on a trans-European basis. What these social fields have in common is that national-level organizations have formed larger groupings that have reoriented their attention from nations or single states to their counterparts across borders. These fields of action have brought people together from across the continent and now form one of the main supports for a more integrated Europe. Indeed, these horizontal linkages that cross borders form the basis for what can be described as a European society.” (1-3)

Indeed, the institutionally-based EU integration has facilitated an increasing variety of social interactions (beyond trade) between different kinds of actors: education, human rights, tourism, sports, to name a few. As people travel for work or leisure or education, they develop great social networks with like-minded Europeans with shared interest. These horizontal networks  contribute to changing the way these actors see themselves: as more European.

At the same time, those individuals who feel the most European are those who have developed the denser social networks of interactions within the EU, that is, those who have benefited the most from it: business people, academics and students and various categories of professionals. Those are the winners of the EU integration. Unsurprisingly then, being European has become a greater part of their identity as functioning within the structures of the EU is part of their lives.

On the other hand, the EU integration has also generated losing categories of people who have not benefited from integration (blue-collar workers, seniors) and have also less interaction with the institutions of the EU. They are more likely to perceive the EU as a threatening force responsible for dismantling national structures that used to protect their status. They are what is known as the “Euro-sceptics”. They still identify mostly with national interest and tend to see EU integration as a threat to national sovereignty.

The winners of EU integration are more likely to analyze social issues within a Europe-wide frame and push for EU solutions whereas the losers of EU integration see the EU as a source of problems that should be solved nationally. And so, the social distribution of winners and losers structure potential tensions and conflicts when it comes to further EU integration. In between these categories of people is an “on-the-fence” group (roughly, middle-class) whose views on the EU vary depending on issues and this group can sway EU-related vote one way or the other, for instance, in the case of France, they voted for the Maastricht Treaty, but against the EU Constitution.

In order to understand these fields. of course, one has to understand how the EU was created and evolved, the different institutions that structure markets. Fligstein, probably keeping in mind that his audience will be mostly US, devotes a couple of chapters to these topics. Indeed, the dynamics of EU integration and conflicts are impossible to understand without such background as these institutions shape (and have shaped) the current state of the EU and what domains are regulated at the EU level (trade, movements of goods and people) and which are still governed at the national level (welfare, labor and pensions, for instance), and which ones are somewhere in between (education and sports). After all, the EU is not like the US.

Fligstein also devotes a fascinating chapter on three examples of market creation within the EU: defense, telecommunications and football industries. For each case, the reader is treated with a thorough description of the field, the different actors, the EU institutional framework that restructured these industries and the current state of these industries (as the EU integration is an uncertain and unfinished project). The complexity involved in EU integration has to do with the fact that national states within the EU have different systems of governance and different interests. There is no such thing as capitalism but national capitalisms and a great deal of the EU institutional apparatus is dedicated to negotiating directives and treaties agreeable by all the member-states (and as Fligstein shows, this does not always end up with a race to the bottom).

These case studies perfectly illustrate how the struggles for power by different actors (say the UEFA, the G-14, individual players and national leagues) using EU institutions (such as the Court of Justice) to shape the structure of the field (EU football) to their advantage, in the context of technological developments and media restructuring that considerably increased streams of revenues for leagues.

“The three case studies were chosen because they represent cases where European firms became organized on a European basis. They show clearly the dynamics by which previously nationally oriented firms turned toward a Europe-wide market as opportunities emerged, governments changed policy, and the EU intervened to create new collective governance. These processes have been messy and are not yet complete, but they demonstrate how organizing on a European wide basis provides for growth in firm size, revenues, and markets.” (122)

Fligstein then turn to the issues of European identity. Who are the European? That is, who are the people who identify as European to varying degrees alongside their national identity. I have already hinted at the answer above, so, I’ll just provide a longish quote that summarizes the confirmed hypothesis:

“As European economic, social, and political fields have developed, they imply the routine interaction of people from different societies. It is people who are involved in such interactions that are most likely to come to see themselves as Europeans and in a European national project. In essence, Europeans are going to be people who have the opportunity and inclination to travel to other countries, speak other languages, and routinely interact with people in other societies in the Europe-wide economic, social, and political fields. They are also going to be amongst the dominant material beneficiaries of European economic integration. They include owners of businesses, managers, professionals, and other white-collar workers who are involved in various aspects of commerce and government. These people travel for business, live in other countries for short periods of time, and engage in long-term social relationships with their counterparts, either in their firms or among their suppliers and customers, in their cohorts in other governments, or in the practice of their professions. Young people who travel across borders for schooling, tourism, and jobs (often for a few years after college) are also likely to be more European. Educated people who share common interests with educated people around Europe, such as similar professions, interests in charitable organizations, or social and cultural activities. (…) Finally, people with higher income will travel more and participate in the diverse cultural life across Europe. They will have the money to spend time enjoying the good life in other places.

If these are likely to be the people who are most likely to interact in Europe-wide economic, social, and political fields, then it follows that their opposites lack either the opportunity or interest to interact with their counterparts across Europe. Most importantly, blue-collar and service workers are less likely than managers, professionals, and other white-collar workers to have work that will take them to other countries. Older people will be less likely to be adventurous than younger people, and less likely to have learned other languages, or to hold favorable views of their neighbors; moreover, they will probably remember who was on which side on World War II. They will be less likely to want to associate with or have curiosity about people from neighboring countries. People who hold conservative political views that value ‘the nation’ as the most important category will be less attracted to travel, or to know and interact with people who are ‘not like them.’ Finally, less educated and less rich people will lack attraction to the cultural diversity of Europe and be less able to afford to travel.” (126-7)

The data do indeed confirm these trends even the pro-European numbers are still small, but then, the European project is still quite recent compared to the centuries of nation-building.

Another limit that Fligstein notes is the lack of strong social movements across European countries, organized horizontally. Indeed, social movements seem to be still organized nationally: groups that have grievance against the EU tend to petition their national governments for redress. [I would add that only movements that seem to have some European footing are those that relate to global issues, such as the opposition to GMOs... my view on this is that SMOs have done a great work to raise awareness globally and therefore scaling down to the EU level is not that hard. Scaling horizontally on EU-specific issues is trickier.]

In other words, there is no European civil society in a strict sense, no more than there is a Habermasian public space but a multiplicity of fora without actual coordination. This means that the groups that positioned themselves early on to have influence over the EU (businesses) are still the vastly dominant segment of the civil society as they have a strong lobbying presence in Brussels. This points to what has been called the “democratic deficit” of the EU.

This lack of horizontally-organized, EU-wide social movements and lack of public space also contributes to a still large lack of European identification and solidarity.

Since economic integration is largely complete, EU members have turned their attention towards building a European society. Fligstein identifies several threads leading to such a project: loosening up of intra-European migration which has increased movement of people within EU countries, the rise of Europe-wide civic associations (although a lot of Europe-wide are trade associations that emerged with the Single market in 1985). Education is the next big work-in-progress for the EU, with the Europeanization of the curriculum, the strengthening of language education and the harmonization of higher education degrees along with specific programs like Erasmus.

Here again, Fligstein notes one of the barriers to facilitating the rise of a European society: the lack of European culture. National cultures still largely dominate the field and popular culture is dominated by US media products. European culture is still largely limited to exchange of national programs between national tv networks along with movie co-productions. Music is still largely a national business with global corporations.

In the political field, national politics still dominates what happens at the European level. However, most mainstream political parties are now pro-integration (with the notable exception of England where resistance to integration has always been the strongest). Anti-European attitudes and platforms are political losers and relegated to nationalist / neo-fascist fringes who see the EU as an infringement to sovereignty and a dilution of the nation, or far left parties that see it as a neo-liberal plot.

On the other hand, certain groups, such as regional groups, have been able to use the EU human rights system to make gains against national states. All in all, the political field is far from stable and this is where the potential for euroclash is the greatest.

This is obviously a very detailed (and chock full o’data) book that perfectly demonstrates the strength of economic sociology and its capacity to bring back the social to explain the economic AND the consequences of embeddedness. It’s not an easy read especially for people completely unfamiliar with the EU but otherwise, it will be equally valuable to organization sociologists.

Posted in Book Reviews, Corporatism, Culture, Economic Sociology, Economy, Education, Embeddedness, Identity, Labor, Media, Migration, Movies, Music, Nationalism, Networks, Politics, Public Policy, Social Capital, Social Change, Social Disadvantages, Social Inequalities, Social Institutions, Social Interaction, Social Movements, Social Privilege, Social Research, Social Structure, Social Theory, Sociology, Sports | No Comments »

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